So how do you determine if you need to charge a fee ?
In my experience, a traditional BA usually has some form of consistent fee structure.
ta
rolf
Open Wealth Creation
- Thread starter padipadi
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So how do you determine if you need to charge a fee ?
In my experience, a traditional BA usually has some form of consistent fee structure.
ta
rolf
Pretty straight forward. Education is free. If you'd like us to asssit with personal strategy planning, finance structure planning and obtaining finance, source and buy property (access to our research team alone is worth our fee) find and guarentee a tenant for 12 months, provide depreciation report we charge a one off fee of 2.2% inc gst of the property price. Then mentoring meeting every 6 months is free.
Our fee is a management fee which you can claim as an expense.
Our fee is a management fee which you can claim as an expense.
that looks to be a a good approach then since there isnt a dual agency scenario ?
Rental guarantees are scary though........... a decent IP wont usually need them.
ta
rolf
Yeah we never (well very occasionally if someone breaks lease) have to pay the rental guarantee.
I actually set the business up based on my brothers needs. He worked in the mines and when home had no time to find a good investment so I simply looked at every step and worked out a system to reduce risk and ensure he (and his wife) would have comfort. He simply wanted to say 'ok another one' and someone would do everything. Therefore a rental guarantee was added as this is something that can scare people. We also interview and appoint property managers for clients as part of our service. We end up managing most client properties or should I say managing the property manager.
I actually set the business up based on my brothers needs. He worked in the mines and when home had no time to find a good investment so I simply looked at every step and worked out a system to reduce risk and ensure he (and his wife) would have comfort. He simply wanted to say 'ok another one' and someone would do everything. Therefore a rental guarantee was added as this is something that can scare people. We also interview and appoint property managers for clients as part of our service. We end up managing most client properties or should I say managing the property manager.
Anyone had any experience with these guys? One of the sales staff has arranged an over the phone meeting with me.
I will go ahead with the meeting to see what information I can get, but think I will continue to do my own research as I am not strapped for time.
Also I have read Cam's book, really love it and using the MAP method to find a property now.
I will go ahead with the meeting to see what information I can get, but think I will continue to do my own research as I am not strapped for time.
Also I have read Cam's book, really love it and using the MAP method to find a property now.
Steve,
Had a phone interview with Michael who is part of their team,they are basically selling house & land packages in new estate areas they have researched to be good long term investment areas.
In saying that they are upfront with the fee they charge for their services in sourcing the property for you at about a 10k fee.
Just make sure the agreed H&L package you purchase off them is at market rate and no more.
Also ask them where they have invested in previously and what growth they have had over an extended period would be my advice..
Coota
Had a phone interview with Michael who is part of their team,they are basically selling house & land packages in new estate areas they have researched to be good long term investment areas.
In saying that they are upfront with the fee they charge for their services in sourcing the property for you at about a 10k fee.
Just make sure the agreed H&L package you purchase off them is at market rate and no more.
Also ask them where they have invested in previously and what growth they have had over an extended period would be my advice..
Coota
Hey Coots,
Should note our fee ends up being around $2800 after tax deductions, depreciation schedule, prof photos, etc etc.
You're more than welcome to pick a letter of the alphabet and we'll give you a clients name with that letter and you can ask about the service and portfolio performance.
I buy in every area our clients buy and nothing is shown to a client unless I'd be satisfied adding that property to my personal portfolio.
Every property is at market value and no kickbacks are taken. I don't need the money from business so I don't have to squeeze money from rookie investors to make a living.
I'm a developer and we build high rise apartments. We currently have over 1200 apartments under construction across Perth, Melbourne and Brisbane, yet I only buy new house and land myself which is situated in infill areas to leverage growth through lack of supply. New means they cost little or nothing to hold due to depreciation in the first few years until rent makes them positive and they have great tenant appeal with low maintenance.
Hope that helps
Should note our fee ends up being around $2800 after tax deductions, depreciation schedule, prof photos, etc etc.
You're more than welcome to pick a letter of the alphabet and we'll give you a clients name with that letter and you can ask about the service and portfolio performance.
I buy in every area our clients buy and nothing is shown to a client unless I'd be satisfied adding that property to my personal portfolio.
Every property is at market value and no kickbacks are taken. I don't need the money from business so I don't have to squeeze money from rookie investors to make a living.
I'm a developer and we build high rise apartments. We currently have over 1200 apartments under construction across Perth, Melbourne and Brisbane, yet I only buy new house and land myself which is situated in infill areas to leverage growth through lack of supply. New means they cost little or nothing to hold due to depreciation in the first few years until rent makes them positive and they have great tenant appeal with low maintenance.
Hope that helps
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Are you saying your fee is tax deductible?
That's correct Terry. The management fee is deductible.
Yes, a genuine management fee would be but not a buyers agent fee.
ID 2009/9 states that a fee paid to acquire a property is not tax deductible it is added to the cost base. You can call it anything you like but doesnt make it deductible.
http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID20099/00001
Given the fee is based on a percentage of the property price it seems to fit exactly into what ID 2009/9 states is not deductible. Ill ask my guys in ato audit their thoughts.
ATO looks at sundry expenses for a rental property acquired in the first year and sees a fee of 5k. Audit flag.
Worse if the client only has one property then impossible it was even a fee to review a current portfolio of assets.
http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID20099/00001
Given the fee is based on a percentage of the property price it seems to fit exactly into what ID 2009/9 states is not deductible. Ill ask my guys in ato audit their thoughts.
ATO looks at sundry expenses for a rental property acquired in the first year and sees a fee of 5k. Audit flag.
Worse if the client only has one property then impossible it was even a fee to review a current portfolio of assets.
Rest assured our developement management fee is deductible. It's not an acquisition fee that a BA charges. Shoot me an email if you want clarification from our legal team.
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Just post up the details of how the management fee is calculated and a sample invoice, doesnt have to be an actual invoice, and the agreement behind it and can ask for a private binding ruling which would come back in about 30 days. If you have a PBR just post it up and that would confirm whether deductible or not. Then everyone gets to see it. Somersoft is great for that.
Have you also checked what the affiliation is with the spec builder/BA? is it one builder they use? are all costs associated with BA/spec builder transparent??
Not saying this is the case with this group, however, this is a question I asked a BA who was promoting land and house packages for growth etc. turns out BA was also receiving a fee from the builder, this I would most definitely have issues with, CONFLICT OF INTEREST???
Without sounding weird I'm currently in bed so a bit tough but happy to oblige at a later date. My funds management company Open Corp holds an Australian finanacial services lience (AFSL) so rest assured we have external audit committes that ensure we are ASIC and ATO compliant at all times.
Cam
All good. Dont expect it right away. At least for the forum we can apply for a PBR for free and then at least get a clear answer from the ATO. We are all here to help each other.
All good. Dont expect it right away. At least for the forum we can apply for a PBR for free and then at least get a clear answer from the ATO. We are all here to help each other.
Hey MTR, please check my post above at 9:19
You should know I started my education company because a close friend lost his life savings in the early 2000's after buying over inflated propety using $400 deposit bonds. Around 3500 people lost collectively around $60m in this scam alone. I love kicking industry sharks. Nic the editor of API mag asked to interview me at the recent Melbourne property expo. She asked what I'd like to discuss and I said seeing as we're at an expo lets talk about property sharks.
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Sorry all but this is my last post. I just recieved a private message and somersoft have said that my posts in this thread have been self promoting. Strange as this thread started asking if anyone knew anything about Open but apparently I'm not able to discuss the topic. (my previous posts have been edited by ss)
Safe investing all
Cheers cam
Safe investing all
Cheers cam
For what it's worth I think his MAP process is excellent as a base to follow for capital growth properties.
I had a friend show me an OWC proposal recently to get my thoughts, I felt at just above $460K in Griffin with costs for a total of just above $500K a bit rich for an investment of this type and he could do better with a bit of patience and a lot more due diligence/research.
Regardless of sales reports proposing capital gain (8%) which is only a guestimate, it's not guaranteed as really they & you don't know what will happen in the future in that area.
The spec home was still a local builder (nothing super special in my eyes) who had customised more to the land developers request rather than anything else, in some of these boutique estates they (land developers) want unique designs and one offs, not all looking the same which can sometimes give these boutique estates a higher perceived value in the buyers mind.
The quoted land priced and build price were above what my direct enquires found which raised a red flag for me personally and then when the marketing material places the property in question under the median, when the Griffin median is around $430K, I find that hard to digest.
One of OWC/Cam's rules which he's very clear about is buy under the median.
I personally feel the bank valuation for this would get knocked on it's head, with various marketers pitching the northern corridor extensively and adding premiums, many are just not getting through on their valuations, this is what I've been told by a few developers in the area.
I did actually go and read the 4yr old investment book Cam published and subsequently I have watched a few of his WODs on youtube, and the information presented vs the time it takes to watch, absorb and possibly pick up a few nuggets, I feel it would be well worth anyones time to go and check out.
I like to always keep an open mind about these things.
Oh crap I forgot to add a disclaimer: I'm not affiliated with anything that's OPEN.
